Permian Resources Corp - 10-K filing on 2019-02-25

Shareholders' Equity and Noncontrolling Interest	12 Months Ended
Shareholders' Equity and Noncontrolling Interest	Dec. 31, 2018
Equity [Abstract]
Shareholders' Equity and Noncontrolling Interest	Note 10—Shareholders' Equity and Noncontrolling Interest On March 7, 2018, Silver Run Sponsor, LLC (“Silver Run Sponsor”), the Riverstone Purchasers and the Centennial Contributors completed an underwritten public offering of 25,000,000 shares of Class A Common Stock. No cash proceeds were received by the Company in connection with this offering and 3,347,647 shares of CRP Common Units (and corresponding shares of Class C Common Units) were converted to shares of Class A Common Stock on a one-to-one basis. A tax benefit of $7.2 million was recorded in equity as a result of the conversion of shares from the noncontrolling interest owner. On November 9, 2017, Silver Run Sponsor, the Riverstone Purchasers and Centennial Contributors completed an underwritten public offering of 25,000,000 shares of Class A Common Stock. No cash proceeds were received by the Company in connection with this offering and 3,494,583 shares of Class C Common Units were converted to shares of Class A Common Stock on a one-to-one basis. In addition, a tax benefit of $20.0 million was recorded in equity as a result of the conversion of shares from the noncontrolling interest owner. On May 25, 2017, the Company’s stockholders approved at a special meeting the issuance of 26,100,000 shares of Class A Common Stock upon the conversion of 104,400 shares of Series B Preferred Stock that were held by affiliates of Riverstone Investment Group LLC in a private placement. There were no cash proceeds received by the Company in connection with this issuance. On May 4, 2017, the Company entered into subscription agreements with certain investors pursuant to which such investors agreed to purchase, in the aggregate, 23,500,000 shares of Class A Common Stock at a purchase price of $14.50 per share, for gross proceeds of approximately $340.8 million. The closing under the subscription agreements occurred concurrently with the closing of the GMT Acquisition on June 8, 2017, and the proceeds were used to fund a majority of the purchase price of that acquisition. On December 28, 2016, in connection with the Silverback Acquisition, the Company issued and sold in private placements (i) 3,473,590 shares of Class A Common Stock and 104,400 shares of Series B Preferred Stock to affiliates of Riverstone Investment Group LLC and (ii) 33,012,380 shares of Class A Common Stock to certain other investors, resulting in net cash proceeds of approximately $889.6 million. The Company used the proceeds from the private placements to fund the cash consideration for the Silverback Acquisition and the remaining proceeds for general corporate purposes. The shares of Series B Preferred Stock were subsequently converted into shares of the Company’s Class A Common Stock on a 250-to-one basis in 2017 as discussed above. On October 11, 2016, in connection with Business combination, the Company issued and sold in private placements (i) 81,005,000 shares of Class A Common Stock to Riverstone Centennial Holdings, L.P. and (ii) 20,000,000 shares of Class A Common Stock to certain other accredited investors, resulting in net cash proceeds of approximately $1.0 billion. The outstanding shares of Class B Common Stock converted into shares of Class A Common Stock on a one-for-one basis in connection with the Business Combination. Additionally, the Company issued 20,000,000 shares of Class C Common Stock to the Centennial Contributors and one share of Series A Preferred Stock to CRD in connection with the Business Combination. Class A Common Stock Holders of the Company's Class A Common Stock are entitled to one vote for each share held on all matters to be voted on by the Company's stockholders. Holders of the Class A Common Stock and holders of the Class C Common Stock vote together as a single class on all matters submitted to a vote of the Company's stockholders, except as required by law. Unless specified in the Charter (including any certificate of designation of preferred stock) or Bylaws, or as required by applicable provisions of the Delaware General Corporation Law or applicable stock exchange rules, the affirmative vote of a majority of the Company’s shares of common stock that are voted is required to approve any such matter voted on by the Company’s stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors (subject to the right of the holder of the Company’s Series A Preferred Stock to nominate and elect one director). Subject to the rights of the holders of any outstanding series of preferred stock, the Company’s stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the Class A Common Stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class A Common Stock. Class C Common Stock The Company had 12,003,183 shares of Class C Common Stock outstanding as of December 31, 2018, which represent the remaining portion of the 20,000,000 shares of Class C Common Stock issued to the Centennial Contributors in connection with the Business Combination that had not been redeemed or exchanged as of such date. Holders of Class C Common Stock have the right to vote on all matters properly submitted to a vote of the stockholders and vote together as a single class with the holders of Class A Common Stock. In addition, the holders of Class C Common Stock, voting as a separate class, are entitled to approve any amendment, alteration or repeal of any provision of the Company’s Charter that would alter or change the powers, preferences or relative, participating, optional, other or special rights of the Class C Common Stock. Holders of Class C Common Stock are not entitled to any dividends from the Company and are not entitled to receive any of its assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of its affairs. Shares of Class C Common Stock may be issued only to the Centennial Contributors, their respective successors and assigns, as well as any permitted transferees of the Centennial Contributors. A holder of Class C Common Stock may transfer shares of Class C Common Stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder’s CRP Common Units to such transferee in compliance with the A&R LLC Agreement (as defined below). Holders of Class C Common Stock generally have the right to cause CRP to redeem all or a portion of their CRP Common Units in exchange for shares of the Company’s Class A Common Stock or, at CRP’s option, an equivalent amount of cash. The Company may, however, at its option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption by CRP. Upon the future redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock will be canceled. Preferred Stock As of December 31, 2018 and 2017, the Company had one share of Series A Preferred Stock outstanding which was issued to CRD in connection with the Business Combination. NGP, as the current holder of the Series A Preferred Stock, is not entitled to any dividends from the Company, but is entitled to preferred distributions in liquidation in the amount of $0.0001 per share of Series A Preferred Stock and has a limited voting right as described below. The Series A Preferred Stock is redeemable by the Company (i) at such time as NGP and its affiliates cease to own, in the aggregate, at least 5,000,000 CRP Common Units and/or shares of Class A Common Stock (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions), (ii) at any time at NGP’s option or (iii) upon a breach by NGP of the transfer restrictions relating to the Series A Preferred Stock. In addition, for so long as the Series A Preferred Stock remains outstanding, NGP will be entitled to nominate one director for election to the Company’s board of directors in connection with any vote of the Company’s stockholders for the election of directors, and the vote of NGP will be the only vote required to elect such nominee to the Company’s board of directors. Warrants The Company’s Public Warrants were originally issued in connection with the IPO of Silver Run Acquisition Corporation. On March 1, 2017, the Company delivered a notice of redemption to all holders of its Public Warrants announcing its intention to redeem any Public Warrants that remained unexercised and outstanding after March 31, 2017 for $0.01 per Public Warrant. As of December 31, 2018 and 2017, all of the Company’s Public Warrants have been either exercised for shares of Class A Common Stock or redeemed for $0.01 per Public Warrant. As a result of all such Warrants exercised in 2017, the Company issued in aggregate 6,235,790 shares of Class A common stock to holders of Public Warrants. As of December 31, 2018, 8,000,000 Private Placement Warrants remained outstanding. Private Placement Warrants are non-redeemable so long as they are held by Riverstone or its permitted transferees. Each whole Private Placement Warrant is exercisable for one whole share of Class A Common Stock at a price of $11.50 per share. The warrants became exercisable on March 1, 2017 and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Noncontrolling Interest The noncontrolling interest relates to CRP Common Units that were originally issued to the Centennial Contributors in connection with the Business Combination and continue to be held by holders other than the Company. At the date of the Business Combination, the noncontrolling interest held 10.9% of the ownership in CRP. The noncontrolling interest percentage is affected by various equity transactions such as CRP Common Unit and Class C Common Stock exchanges and Class A Common Stock activities. As a result of the exchange of the CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock on October 11, 2016 and the issuance of shares of Class A Common Stock and Series B Preferred stock on December 28, 2016 (as discussed in the preceding section above), the noncontrolling interest ownership of CRP decreased to 7.8% as of December 31, 2016. As of December 31, 2017, the noncontrolling interest ownership of CRP decreased to 5.7%. The decrease was the result of Class A Common Stock issuance in May and the exchange of CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock in November as discussed in preceding sections above. As of December 31, 2018, the noncontrolling interest ownership of CRP decreased to 4.3%. The decrease was mainly the result of the exchange of CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock. The Company has consolidated the financial position, results of operations and cash flows of CRP and reflected that portion retained by other holders of CRP Common Units as a noncontrolling interest. Refer to the Consolidated Statements of Shareholders’ Equity for a summary of the activity attributable to the noncontrolling interest during the period. Owners’ Equity (Predecessor) At October 10, 2016 (prior to the Business Combination), members included Centennial HoldCo, Celero and Follow-On, owning an approximate 61.2%, 21.2% and 17.6% membership interest in Centennial OpCo, respectively. CRP had two classes of membership interests outstanding: Class A, which consisted of membership interests held by CRD and Follow-On; and Class B, which consisted of membership interests held by Celero. On October 10, 2016 CRP recorded a deemed contribution attributable to the consummation of the Business Combination, which resulted in the achievement of the payout conditions with respect to the incentive units and CRP recorded $165.4 million of compensation expense. Additionally, CRP recorded a deemed contribution of $14.0 million attributable to certain transaction costs related to the Business Combination paid by the Centennial Contributors. As of December 31, 2015, CRD had contributed $289.4 million and had a remaining capital commitment of $32.5 million, Follow-On had contributed $84.2 million and had a remaining capital commitment of $100.3 million, and Celero had contributed $125.4 million and has no remaining capital commitment. In 2015 Follow-On contributed $84.2 million to Centennial OpCo in exchange for membership interests in Centennial CRP. In addition, CRD contributed approximately $27.2 million to CRP in exchange for additional membership interests in CRP.